Airbnb sets sight on expansion in China
21 Aug 2015
Serving Chinese citizens outside of China had evolved as an industry itself, accommodation rental startup Airbnb plans to set up shop in the country.
Airbnb, a startup based in San Francisco, allowed people to offer their homes for rent and had completed a fund-raising round in June of more than $1 billion.
According to a company blog post, Airbnb would be targeting Chinese tourists looking for accommodations abroad.
As it sought to prepare for a domestic launch, the company had emerged as ''strategic partners'' with China Broadband Capital and Sequoia Capital China, and was looking for a CEO to head up a domestic branch.
Sequoia's founding partner, Neil Shen, co-founded CTrip, one of China's leading travel booking websites.
It was, however, not clear whether those partnerships consisted of financial investments in Airbnb's China operations.
Targeting outbound tourism was an obvious move for AirBnB according to commentators.
For instance, China was already home to several well-funded companies in the same line of business as Airbnb, that served the domestic market.
By way of example Tujia, had been doing business since 2011, and recently raised $300 million from some of the country's top venture capital firms.
Unlike AirBnB, Tujia had taken a decidedly ''hands on'' approach when it came to managing its listed rental properties in China.
It employed staff that personally verified each rental space, and also provided cleaning services as also 24/7 call support.
Meanwhile, in a statement on its blog, Airbnb said outbound bookings from Chinese tourists had increased 700 per cent in the last year, which made it the company's fastest-growing market of customers booking stays outside their home country.
Airbnb did not offer details of how it would meet the Chinese demand, but according to the company it wanted to ''create a truly localized platform'' while being ''prudent'' in establishing operations within China.
According to commentators the strategy closely resembled the one taken by the professional social network LinkedIn, which worked with the same two venture capital firms when it introduced a local site in early 2014. The professional network also hired a separate chief for its China operations.
